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Commercial Leases: Does it Matter if You Fail to Give Notice of Intent to Renew Your Lease?

A common provision in commercial leases is an option requiring the tenant to notify the landlord of their intention to renew the lease or purchase the property by a specific date. What happens, however, if the tenant fails to provide the landlord with timely notice? In New Jersey, courts generally enforce the lease as written. Therefore, if the tenant fails to renew by the deadline, courts will likely strictly enforce the lease terms.

Exceptions to the General Rule: When a Tenant’s Late Notice is Permitted

There are a few narrow exceptions to the general rule of strict enforcement of the option provision. There are five special circumstances: (1) the tenant would sustain substantial harm if it were forced to relocate; (2) the landlord did not change its position in reliance on the tenant’s delay; (3) the tenant’s failure to give timely notice was due to an honest mistake of fact; (4) the delay was slight; and (5) the loss to the landlord was insignificant. The relocation prong likely requires an inquiry into whether the success of the business relies on the location.

Contact me personally today to discuss your New Jersey real estate and landlord tenant matter. I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns. You can reach me toll free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com.